LDK Solar reports 10th quarter of heavy losses

Silicon wafers
LDK has increased its silicon wafer shipments on a year-over-year basis (LDK Solar)

LDK Solar Co. Ltd. (XinyCity, China) reported its 10th quarter of consecutive heavy losses in its third quarter 2013 results, with a -49% operating margin and a net loss of USD 130 million.

The company saw USD 157 million in quarterly revenues, a 46% decline on a year-over-year basis. On November 22nd LDK reported that it had secured a USD 256 million credit facility from a syndicate of Chinese banks, which may keep the company afloat but which cannot be used to address its massive debt.

“Our third quarter results were in line with expectations,” stated LDK Solar President and CEO Sam Tong. “We were pleased to deliver 37% sequential revenue growth and reduce our net loss available to LDK Solar's shareholders both sequentially and on a year-over-year basis.”

“We saw some signs of further improvement in the PV market during the quarter. While European PV markets remained soft, we experienced increased demand from China, North America and other emerging solar markets.”

Bad times for creditors

Concurrent with its results, LDK announced that it has reached a two-week forbearance agreement to delay again an interest payment due in August 2013 on its 2014 bonds. The company says that it is attempting to come to a consensual agreement.

Things do not look good for LDK's creditors. This is the third forbearance agreement on the interest payments, and the company's recent credit agreement with the Chinese banks expressly forbids using the proceeds to pay off debts.

However, it may assist with LDK's low level of cash. LDK ended the third quarter of 2013 with only USD 95.4 million in cash and equivalents, and USD 130 million in short-term bank deposits. The company has already drawn down USD 33 million through the deal.

“While the onshore syndicate facility will alleviate some of our onshore operating cash flow pressure in Jiangxi Province, our offshore value and cash flow are insufficient to solve even our short-term liquidity associated with our offshore indebtedness,” notes LDK CEO Tong.

“We are working closely with our stakeholders and relevant advisors to negotiate a consensual solution to our offshore debt obligations.”

Improvements predicted in Q4 2013

LDK shipped 385 MW of silicon wafers and 78.4 MW of solar photovoltaic (PV) cells and modules during the quarter, an improvement in wafer volume over the third quarter of 2012.

The company expects a substantial increase in shipments and revenues in the fourth quarter of 2013, predicting USD 200-250 million in revenues, 480-520 MW of wafer shipments and 120-160 MW of PV cell and module shipments.



2013-11-26 | Courtesy: LDK Solar | © Heindl Server GmbH

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